Styx: Stop saving as v4 D: I also use GIMP so that post wasn't really helpful but, ty I guess.
As for the others, after further testing(and reading up on how to add alpha support manually to old items) I figured it out why alpha does and yet does not work.
So here it goes, first, export any model your working on as v4. Then compare it in your favorite hex viewer to the same model exported as v7.
The Problem: The v4 has alpha channel enabled however the v7 format adds a huge number of blanks (hex 00) between the 2nd mention the texture name and the first mention of the name of the blender object.
The Solution: See that second mention of your texture name? Ya? Good. Move it to line 150(in hex) and you're done, it's that easy. (I did some testing and it doesn't have to be exactly line 150, just move it really close to it.)
Note: It would be so ossim to see a button in the next version of the export script that automatically does that and maybe add a second button that changes the blending mode.(make the 4th byte before the first mention of the object name equal to 64 and that makes gunz apply an additive blending mode to the model, but it only works with v4) I would do it myself but I R NUB. D: